News and Updates

CDA-registered EC backs NEA decision to take over Abreco

February 21, 2018

A member of a national federation of stock electric cooperatives (ECs) registered with Cooperative Development Authority (CDA) has expressed his full support to the National Electrification Administration (NEA) in taking over the management control of Abra Electric Cooperative (Abreco).

David Solomon M. Siquian, director of the Philippine Federation of Electric Cooperatives (Philfeco) and general manager of Isabela II Electric Cooperative (Iselco II), described the recent action by the NEA as a “positive approach” to save the ailing Abreco from total collapse.

Philfeco represents 12 ECs that are registered with CDA, including Abreco.

Last February 9, the NEA, through the Task Force Duterte Abra Power, exercised its step-in rights and took over the management and operations of Abreco, deactivating its Board of Directors and suspending its general manager, to pave the way for the electrification agency’s efforts to rehabilitate the distribution utility.

The NEA intervention happened days after the Philippine Electric Market Corporation (PEMC) issued a default notice and suspension notice to Abreco from the wholesale electricity spot market due to its failure to settle its financial obligation amounting to over P200 million.

Siquian, Philfeco representative for the EC Council of Leaders during the 1st EC Board of Directors’ Summit held in Malay, Aklan on February 16 and 17, believed the NEA takeover will redound to the benefit of the member-consumer-owners (MCOs) of Abreco.

“Nakita naman ng buong electric cooperative community na sinuportahan din (ito) ng local government officials like the governor and the congressman. Ang kanilang intention doon is to save Abreco. It is not taking away Abreco from the member-consumers but saving Abreco from another failure,” he said.

Some of the Philfeco members also shared the same view, according to Siquian. “And it would be much better if NEA and CDA will work hand in hand in helping Abreco with its present crisis,” he added.

The NEA has the supervisory powers over ECs across the country, including those registered with the CDA, as mandated under Republic Act 10531, otherwise known as the “National Electrification Administration Reform Act of 2013.”

NEA Administrator Edgardo Masongsong earlier announced that there would be an amendment into Office Order 2017-168, which he issued last September, to include Philfeco representatives as members of the Task Force Duterte Abra Power that will rehabilitate Abreco.

The creation of the Task Force was due to the failure of the Abreco Board to lead the cooperative to meet the operational and financial standards and parameters prescribed by the NEA considering the material and significant adverse findings on its operations as contained in the Comprehensive Audit Report submitted by Electric Cooperative Audit Department (ECAD).

NEA designated Atty. Xerxes Adzuara as Project Supervisor, whose task is to supervise the management and operations of Abreco; Charito Mabitazan, on the other hand, is the Acting General Manager who will manage the day-to-day operations and ensure the efficient delivery of service to MCOs.

Other members of the Task Force are Board presidents and general managers of neighboring ECs, namely, Ilocos Norte Electric Cooperative, Inc. (Inec), Ilocos Sur Electric Cooperative, Inc. (Iseco), and Benguet Electric Cooperative, Inc. (Beneco). The three are all triple-A rated power distribution utilities.

The Task Force is expected to lead the cooperative to meet the management and operational standards and parameters set by the NEA to address the concerns of Abreco to better serve its MCOs. ###